U.S. Stocks Dip Amid Mixed Economic Signals

U.S. stocks slipped slightly on Wednesday after stronger-than-expected employment data helped dilute the negative sentiment generated by escalated Middle East tensions and disappointing news from Nike.

By 09:35 ET (13:35 GMT):
– The Dow Jones Industrial Average contract was down 30 points, or 0.1%.
– The S&P 500 index traded 20 points, or 0.4%, lower.
– The NASDAQ Composite dropped 55 points, or 0.3%.

ADP Employment Rises More Than Expected

The ADP National Employment Report, released earlier Wednesday, indicated that U.S. private payrolls increased more than expected in September, showing that the labor market remains healthy.

Private payrolls increased by 143,000 jobs last month after a rise of 103,000 in August. This was higher than the forecast of 120,000 positions for September.

The ADP report precedes Friday’s closely watched employment report from the Labor Department, which could impact market sentiment ahead of the Federal Reserve meeting.

Middle East Hits Risk Sentiment

The main indices were negative following Iran’s missile barrage at Israel in retaliation to Israeli strikes on Hezbollah. Israeli Prime Minister Benjamin Netanyahu stated that Iran “made a big mistake” and promised retaliation. The U.S. warned of “severe consequences” for Tehran’s actions.

UBS expects the situation to not escalate into an all-out war, despite the potential for further deterioration.

Nike Slumps After Withdrawing Forecast

Nike (NYSE:NKE) stock fell over 7% after withdrawing its full-year financial forecast and reporting a 10% decline in quarterly revenue. The company is undergoing an executive shake-up, replacing CEO John Donahoe with veteran Elliott Hill amid tough competition in the sneaker market.

Humana (NYSE:HUM) stock dipped 23% after a decline in the enrollment of high-rated Medicare plans. Tesla (NASDAQ:TSLA) also fell over 3% due to lower-than-expected vehicle deliveries in a competitive market.

Crude Soars on Middle East Turmoil

Oil prices surged on Wednesday as escalating tensions in the Middle East raised concerns about potential output disruptions.
– The Brent contract climbed 3.1% to $75.84 per barrel.
– U.S. crude (WTI) traded 3.4% higher at $72.22 per barrel.

Both crude benchmarks saw a surge of over 5% on Tuesday following Iran’s attack on Israel. Additionally, U.S. crude inventories fell by about 1.46 million barrels compared to expectations of a 2.1 million barrel decline. The official inventory report will be released later in the session.